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Ringcentral (RNG - Free Report) is now a Zacks Rank #5 (Strong Sell) and I already know you are thinking “now you tell me it’s a sell!” The idea of a stock moving to a Strong Sell is one that is based on the movement of earnings estimates. This tells me that the analysts are moving numbers lower for RNG and that is why this stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day today.
Description
RingCentral, Inc. provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect in North America. Its products include RingCentral Office that provides communication and collaboration across various modes, including high-definition voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Contact Center, a collaborative contact center solution that delivers omni-channel; and RingCentral Engage Digital, a digital customer engagement platform that allows enterprises to interact with their customers. The company's products also comprise RingCentral Engage Voice, a cloud-based outbound/blended customer engagement platform for midsize and enterprise companies; RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office; and RingCentral Live Reports, an add-on for RingCentral Office customers to gather real-time information. In addition, it offers RingCentral Professional, a cloud based virtual telephone service that provides inbound call answering and management services for professionals; and RingCentral Fax that provides online fax capabilities. The company serves a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, as well as others. It sells its products through a network of direct sales representatives, as well as sales agents, resellers, and channel partners. RingCentral, Inc. has strategic partnerships with Alcatel-Lucent Enterprise; and Vodafone Business. The company was incorporated in 1999 and is headquartered in Belmont, California.
When Is a #5 (Strong Sell) a Good Thing?
So now that analysts are lowering numbers, is this the time to take a deeper look at a name like RNG?
The clear answer to this question is yes. Were the analysts right all along on this stock, if so, then why did they wait so long to lower numbers? I mean this is one of those times were going against the heard might be the move.
All that said, let’s take a look at the important numbers.
Earnings History
All looks good on the earnings history front. I see 4 straight beats of the Zacks Consensus Estimate.
Estimates Revisions
So this is where the rubber meets the road.
Normally I see big revisions lower for a #5, but that is not the case for RNG.
This quarter has held still over the last 60 days.
Next quarter has seen a decrease of one penny.
The full year has moved up from $1.16 to $1.23
Next year has moved from $1.51 to $1.55.
So I don’t see a lot of downward pressure on estimates. This could mean that most of the other stocks in the coverage universe are seeing more powerful revisions. That or there is a ghost in the machine.
Valuation
The valuation doesn’t impact the Zacks Rank… but I always look at these numbers because I am a fundamental investor that favors growth. I see a forward PE of 231x, which is more than sky high. I see 32% top line growth, but does that justify that sort of forward multiple?
82x book and 21x sales tells me that this stock has a valuation that is super stretched. I see operating margins moving the wrong way… so that means I would avoid this stock.
Seems this deeper look was worth it.
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Image: Bigstock
Bear Of The Day: Ringcentral (RNG)
Ringcentral (RNG - Free Report) is now a Zacks Rank #5 (Strong Sell) and I already know you are thinking “now you tell me it’s a sell!” The idea of a stock moving to a Strong Sell is one that is based on the movement of earnings estimates. This tells me that the analysts are moving numbers lower for RNG and that is why this stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day today.
Description
RingCentral, Inc. provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect in North America. Its products include RingCentral Office that provides communication and collaboration across various modes, including high-definition voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Contact Center, a collaborative contact center solution that delivers omni-channel; and RingCentral Engage Digital, a digital customer engagement platform that allows enterprises to interact with their customers. The company's products also comprise RingCentral Engage Voice, a cloud-based outbound/blended customer engagement platform for midsize and enterprise companies; RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office; and RingCentral Live Reports, an add-on for RingCentral Office customers to gather real-time information. In addition, it offers RingCentral Professional, a cloud based virtual telephone service that provides inbound call answering and management services for professionals; and RingCentral Fax that provides online fax capabilities. The company serves a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, as well as others. It sells its products through a network of direct sales representatives, as well as sales agents, resellers, and channel partners. RingCentral, Inc. has strategic partnerships with Alcatel-Lucent Enterprise; and Vodafone Business. The company was incorporated in 1999 and is headquartered in Belmont, California.
When Is a #5 (Strong Sell) a Good Thing?
So now that analysts are lowering numbers, is this the time to take a deeper look at a name like RNG?
The clear answer to this question is yes. Were the analysts right all along on this stock, if so, then why did they wait so long to lower numbers? I mean this is one of those times were going against the heard might be the move.
All that said, let’s take a look at the important numbers.
Earnings History
All looks good on the earnings history front. I see 4 straight beats of the Zacks Consensus Estimate.
Estimates Revisions
So this is where the rubber meets the road.
Normally I see big revisions lower for a #5, but that is not the case for RNG.
This quarter has held still over the last 60 days.
Next quarter has seen a decrease of one penny.
The full year has moved up from $1.16 to $1.23
Next year has moved from $1.51 to $1.55.
So I don’t see a lot of downward pressure on estimates. This could mean that most of the other stocks in the coverage universe are seeing more powerful revisions. That or there is a ghost in the machine.
Valuation
The valuation doesn’t impact the Zacks Rank… but I always look at these numbers because I am a fundamental investor that favors growth. I see a forward PE of 231x, which is more than sky high. I see 32% top line growth, but does that justify that sort of forward multiple?
82x book and 21x sales tells me that this stock has a valuation that is super stretched. I see operating margins moving the wrong way… so that means I would avoid this stock.
Seems this deeper look was worth it.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>